Shoe Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,300 shoe stores in the US sell most types of new footwear and related items. Major product categories include women’s footwear, men’s athletic footwear, women’s athletic footwear, and children’s athletic footwear. Shoe stores may also sell clothing and accessories, such as socks, belts, hosiery, and jewelry. The shoe store industry includes national chains, regional chains, franchises, and independent operators.

Managing Highly Seasonal Demand

The shoe business is highly seasonal and driven by the fashion calendar, which generally revolves around fall and spring collections.

Dependence On Foreign Sources

Imports account for about 98% of footwear sold in the US according to the American Apparel and Footwear Association (AAFA).

Industry size & Structure

The average shoe store employs fewer than 10 workers and generates $9.4 million annually.

    • The shoe store industry consists of 4,300 companies that employ about 171,600 workers and generate $40.5 billion annually.
    • The industry is concentrated; the top 50 companies account for 82% of industry revenue.
    • The shoe store industry includes national chains, regional chains, franchises, and independent operators.
    • Independent shoe retailers average two to four stores, employ seven workers per store, and carry an inventory worth $250,000 or more, according to National Shoe Retailers Association (NSRA) survey. The average per-pair price is $88.
    • Large companies include Footlocker, Genesco (Journeys, Johnston & Murphy), Caleres (formerly Brown Shoe and parent of Famous Footwear) and DSW (Designer Shoe Warehouse). Large firms may have stores outside of the US or operate the shoe department within another retailer.
                                Industry Forecast
                                Shoe Stores Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 3, 2024 - Slower Growth Expected for Industry
                                • The US shoe stores industry is projected to grow at a CAGR of 2.7% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy's projected growth. Factors that continue to limit consumer spending are higher price levels and interest rates, though both are expected to improve in 2024. Post-pandemic, consumer spending has shown slower gains of 2.5% in 2022 and 2.2% in 2023, supported in part by savings amassed by households from federal pandemic relief programs. According to the forecast, "2024 may bring further deceleration, but improving consumer sentiment may support moderately strong gains in household spending, together with rising wage rates and lower inflation."
                                • A new UBS report in Retail Dive forecasts that 45,000 retail stores may close in upcoming years as online sales gain share. Online retail penetration is expected to rise to 26% from 21%, with retail sales growth of 4% by 2028, as the industry focuses more on fulfillment and distribution centers. If the closures occur, USB said the total number of stores in the US will fall from 958,533 to 913,500. Other factors driving store closures include a tighter lending environment, higher operational costs, and consumers spending more on services than goods. The report stated that sporting goods, clothing, consumer electronics, home furnishings, hobby, book, and music stores have closed the most locations since the first quarter of 2019. Still, retailers can incorporate existing stores as an important piece of their omnichannel capabilities. Per the report, “Our analysis assumes that stores remain an important part of the overall retail ecosystem for retailers and consumers. In the simplest terms, stores serve as hubs of fulfillment and support distribution logistics. This is increasingly more important as consumers are becoming more demanding for convenience or immediate deliveries.”
                                • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                                • More consumers would prefer free shipping over same-day delivery, according to a new Forrester report shared by Retail Dive. About 75% of US online consumers say that free shipping is among the most critical criteria they consider when deciding where to shop online, while only 20% selected next-day or same-day delivery as a key factor. Retailers such as Amazon, Target, and Walmart have invested in same-day and next-day delivery capabilities as a competitive differentiator to speed up delivery times for consumers. Nearly 50% of consumers surveyed by Forrester said the option for same-day delivery has little impact on which retailer or brand they will buy. The average delivery time cited in the article between placing and receiving an order was four days as of April 2023. Consumers have expressed interest in buying online and picking up at a nearby store (22%), curbside pickup (27%), and drive-through pickup options (15%).
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